The International Energy Agency (IEA) is concerned about a dramatic upswing in energy prices, according to its latest monthly report, with oil, gas and coal prices currently trading at multi-year highs.

"Our position is that expensive energy is back … And it poses a threat to economic growth," the Paris-based organization said Friday.

As a result of soaring energy prices, the IEA downwardly revised its demand outlook over the next two years. The group now expects demand growth to slow by 110,000 barrels per day to 1.3 million barrels per day (mb/d) in 2018 and 1.4 mb/d in 2019.

International benchmark Brent crude traded at around $81.29 Friday morning, up around 1.2 percent, while U.S. West Texas Intermediate (WTI) stood at $71.73, slightly over 1 percent higher.

'New twin peaks' for demand and supply

On Tuesday, the International Monetary Fund (IMF) cut its global economic forecasts for 2018 and 2019 by 0.2 percentage points to 3.7 percent. The Washington D.C.-based institute also raised concerns that demand for oil may slump over the coming months.

In addition to the IEA and the IMF, OPEC also cut its forecast of oil demand growth on Thursday. The Middle-East dominated cartel joined a chorus of organizations citing headwinds facing the broader economy next year, highlighting the potential fallout from a U.S.-Sino trade war as well as volatile emerging markets.

The closely-watched IEA report comes less than four weeks before the U.S is set to impose targeted crude sanctions against Iran, with Brent prices now established above $80 a barrel.

"It is an extraordinary achievement for the global oil industry to meet the needs of a 100 million barrels per day market, but today … We have reached new twin peaks for demand and supply by straining parts of the system to the limit," the IEA said Friday.

The group warned recent production increases had come at the expense of spare capacity, which has already been stretched to just 2 percent of global demand — with "further reductions" to come.

"This strain could be with us for some time and it will likely be accompanied by higher prices, however much we regret them and their potential negative impact on the global economy," the IEA said.

Iran sanctions

Earlier this year, OPEC agreed to start raising output to stabilize markets and offset losses in major suppliers Iran and Venezuela, OPEC's third and sixth-largest producers, respectively.

Tehran is facing the loss of most of its energy export markets, as Trump's administration prepares to impose sanctions against Iran's crude industry from November 4. The move is widely expected to have an immediate impact on Iran, although estimates of exactly how much of the country's oil could disappear vary widely.

Some energy market analysts expect around 500,000 barrels per day to disappear once U.S. sanctions against Iran take effect, while others have warned as much as 2 mb/d could come offline over the coming weeks.

Washington has also ratcheted up the pressure on global buyers of Iranian crude by demanding they completely cut-off the Islamic republic. This is thought to be part of a sustained effort to undermine Iran's crude industry, in a bid to force the country to negotiate a new nuclear agreement.

However, the U.S. has since said it could consider exemptions for countries that have already shown efforts to reduce their imports of Iranian oil.

"Both global oil demand and supply are now close to new, historically significant peaks at 100 million barrels per day, and neither show signs of ceasing to grow any time soon," the IEA said.